Question 1

What is productive efficiency? Does it guarantee that markets are operating efficiently?

Accepted Answer

The answer of What is productive efficiency? Does it guarantee...

Question 2

Exhibit 12-10
The following table shows how the total cost of producing canisters of peanuts varies with output and capital in the long run in a perfectly competitive industry.
  Refer to Exhibit 12-10.What levels of capital (K=1,K=2,or K=3)would the firm choose in the long run for producing three canisters and five canisters of peanuts per hour,respectively?

Accepted Answer

The answer of Exhibit 12-10
The following table shows how the...

Question 3

Why do short-run profits in a perfectly competitive industry tend to disappear over time?

Accepted Answer

The answer of Why do short-run profits in a perfectly...

Question 4

Complete the chart below for a firm that is operating under conditions of perfect competition where the market price is $22.What level of output maximizes the firm's profits?

Accepted Answer

The answer of Complete the chart below for a firm...

Question 5

Exhibit 12-10
The following table shows how the total cost of producing canisters of peanuts varies with output and capital in the long run in a perfectly competitive industry.
  Refer to Exhibit 12-10.If firms can freely enter or exit the industry and face the cost structures specified,what is the likely long-run price of a canister of peanuts?

Accepted Answer

The answer of Exhibit 12-10
The following table shows how the...

Question 6

The graph represents a price-taking firm producing q₁ units of output.Is the firm making a profit,experiencing a loss,or earning a normal profit? Should the firm increase output,decrease output,or shut down? Explain.

Accepted Answer

The answer of The graph represents a price-taking firm producing...

Question 7

What would be the long-run equilibrium result of output expansion in a decreasing-cost industry?

Accepted Answer

The answer of What would be the long-run equilibrium result...

Quiz 12: Firms in Perfectly Competitive Markets

What is productive efficiency? Does it guarantee that markets are operating efficiently?

Why do short-run profits in a perfectly competitive industry tend to disappear over time?

Complete the chart below for a firm that is operating under conditions of perfect competition where the market price is $22.What level of output maximizes the firm's profits?

The graph represents a price-taking firm producing q1 units of output.Is the firm making a profit,experiencing a loss,or earning a normal profit? Should the firm increase output,decrease output,or shut down? Explain.

What would be the long-run equilibrium result of output expansion in a decreasing-cost industry?

The graph represents a price-taking firm producing q₁ units of output.Is the firm making a profit,experiencing a loss,or earning a normal profit? Should the firm increase output,decrease output,or shut down? Explain.